Today’s decision will be the culminating point of the negotiation week. After the market briefly doubted that there would be another rate cut today, such a movement is now almost completely discounted, says Michael Pfister, Commerzbank’s currency analyst.
Few reasons for the ECB to surprise with a hard line posture
“The ECB tends not to be influenced by such events and tends to change its posture slowly. In addition, the strong appreciation of the euro from the last rate of rates and the risk of an avalanche of cheap Chinese products in Europe reduce the risks of inflation. As a result, there are few reasons for the ECB to surprise with a hard line posture.”
“Things will probably become more exciting in regards to the orientation for the next meetings. If the BCE president, Christine Lagarde, hints at the following press conference that the Governing Council is now more convinced that it is better to wait and see how the commercial war is developed, the euro could recover some land.”
“However, I think such a scenario is unlikely. Lagarde will probably want to maintain all open options, and the behavior of the euro will depend mainly on the writing used. However, given the factors that argue against a hard line surprise, the risks are probably biased towards a weaker euro.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
